TMI Blog2016 (7) TMI 1584X X X X Extracts X X X X X X X X Extracts X X X X ..... after referred to as ''Act 1961 ). Dispute relates to Assessment Year 2003-2004. Appeal has arisen from judgment and order dated 24.7.2014, passed by Income Tax Appellate Tribunal, Lucknow Bench ''A' Lucknow (hereinafter referred to as 'Tribunal') in ITA No.382/LKW/2011 whereby the aforesaid appeal of Assessee has been partly allowed. Though, in the memo of this appeal, several substantial questions of law have been formulated by appellant but learned counsel for appellant at the outset stated that he propose to press only one substantial question of law relating to notice under section 143(2) of Act, 1961 since, if that question is decided in his favour, entire matter will be open to appellant to be raised before Assessing Authority. 3. With consent of learned counsel for parties, we proceed to hear this appeal finally on the following substantial question of law: Whether Tribunal was justified in holding that non issue of notice under section 143(2) would not vitiate assessment, made by Assessing Authority, since Assessee filed return under section 148 after expiry of the period prescribed in law. 4. It is not a disputed fact that before m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 11.12.2008. Neither, Assessee nor Revenue could give the date on which Assessee submitted reply to notice dated 25.5.2007 requesting Assessing Authority to treat return filed on 2.5.2005 as return in compliance to notice under section 148. In these circumstances, Tribunal treated the date of filing of said letter on 11.12.2008. 10. We find that the above view of Tribunal is erroneous. In Chand Bihari Agarwal (Supra), search and seizure operations were carried out by Department under section 132 of Act, 1961 at residential cum business premises of Assessee on 27.2.2003. A notice under 158BC of Act 1961 was issued on 9/10.12.2003 and served on Assessee on 10.12.2003 requiring him to file his block return within a month of service of said notice. No such block return was filed within the statutory period under section 158BC. Block return was filed on 22.11.2004 declaring undisclosed income. Assessing Officer completed assessment under section 158BC of Act 1961 on 24.2.2005 adding income whereagainst Assessee preferred appeal which was partly allowed. To the extent Assessee failed before Commissioner, he preferred further appeal before Tribunal. The questions formulated by Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er to issue notice under section 143(2) is not a mere procedural irregularity and improper. It is a jurisdictional error. In other words, notice under section 143(2) authorizes Assessing Officer to complete assessment under section 143(3) and same would apply in respect to block assessment also under section 158BC. 14. It is true that in Hotel Blue Moon(Supra), Court was considering applicability and effect of Section 143(2) in the context of Chapter XIV B of Act 1961 which includes Section 158BC but it has very categorically held that it is mandatory and omission on the part of Assessing Officer to issue notice under section 143(2) is incurable since it is not a mere procedural irregularity but a jurisdictional error. 15. Whatever may be the reason available to Assessing Officer to repudiates return filed by Assessee, but if it proceeds to make assessment, a notice under section 143(2) is mandatory. Some relevant observations from judgment in ACIT another versus Hotel Blue Moon (Supra) may be reproduced as under: An analysis of this sub-section indicates that, after the return is filed, this clause enables the Assessing Officer to complete the assessment by following t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all not proceed to make assessment without giving notice under section 143(2) and this is evident from the observations made in Paragraph 30, 32 and 45 of judgment. 30. Notice under Section 148 of the Act for assessment year 1994-1995 was issued on 29.3.2001 whereas for the assessment year 1995- 96, it was issued on 26.12.2000. In response to the notice, the assessee sent letter dated 7.5.2001 to drop the proceeding. Therefore, vide letter dated 18.12.2001, the Deputy Commissioner informed that proceeding may not be dropped and given last opportunity to file return. Along with letter dated 18.12.2001, notices under Section 143 (2) and 142 (1) were also sent. In consequence thereof, the assessee filed return on 7.2.2002 for both the assessment years. After filing of return, 3the Assessing Officer should have applied mind and after considering the material on record on reason to believe , notice under Section 143 (2) of the Act should have been issued afresh. 32. Since return was filed on 7.2.2002, in response to notice under Section 148 of the Act, earlier notice dated 29.03.2001 may not be treated as valid for the purpose of escaped assessment. The Legislature to their wis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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